The Ikeda Brothers are pushing through to get their vegetables out the door.
“We will export to Canada, into Mexico, some to the Pacific Rim. That has really shrunk probably because of the plug ups in the ports,” explained Ikeda Brothers’ farm manager and owner, Tom Ikeda. “We are a fresh product, so we can’t afford to have a weeks-long wait in the port. I have friends in the nut business and they’re really struggling.”
Fuel costs and the lack of truckers are driving up the cost of transportation.
“In the last year, year and a half, I'd say cost has gone up around 20%,” said Ikeda. “As a vegetable farmer, we’re in an open market system, it’s not very easy to pass on those added costs.”
Supply chain issues are not only for exports.
“Farmers are getting hit on both ends, the instability on the inputs they need - think of the cardboard, think of the glass for the wine bottles, think of the fertilizer - and also on the back end moving those products to market gets more and more expensive,” added Brent Burchett, the SLO County Farm Bureau’s Executive Director.
Since 2019, Cal Poly Business Professors Cyrus Ramezani and Chris Carr have studied major ports including Long Beach and Oakland thanks to a partnership with the U.S. Department of Agriculture.
“The logistic chain from door to door from the beginning to end have been affected by COVID and that has created bottlenecks,” said Cal Poly Finance Professor Cyrus Ramezani.
Research shows a market disruption that makes it hard for small farmers to compete.
“Major companies can actually own much of the logistic chain, or they can actually get preferential treatment in terms of pricing because they have the volume,” added Ramezani.
Technology has become quite an asset for big companies.
“Software for managing your warehouse, software to schedule pick up and drop off, there is software to trace your product and where they are in the globe,” said Ramezani.
But in order to break down the digital divide, resources are needed to support producers.
“Subsidizing that technology for them, in terms of putting educational programs to teach farmers how to use digital technologies to manage their shipments. We also proposed that they create farmers cooperatives so farmers can buy key equipment, critical equipment like chassis,” recommended Ramezani.
Farmers want to see a quicker short-term solution.
“It [technology] might help in planning and things like that but still the big issue is the congestion at the ports,” said Ikeda.
The SLO County Farm Bureau said they are also worried about the impact the drought will have on local produce. The lack of workers is another issue on the horizon.
Professor Ramezani and his colleagues will meet with policymakers on June 16, 2022, to further discuss solutions to the supply chain crisis.
To learn more about the research study, click here.
